U.S. copy protection technology firm Macrovision Corp. (NasdaqNM:MVSN - news) on Tuesday said it bought the assets of Midbar Technology Ltd. and TTR Technologies Inc. (NasdaqNM:TTRE - news) to boost its anti-piracy offerings.
Macrovision, which specializes in video DVD, CD-ROM and video game protection software, will broaden its audio offerings with the purchases.
The Santa Clara, California-based company said it would pay $17 million for the assets of Israel's Midbar plus another $8 million over two years if the business meets certain revenue targets.
Macrovision will also pay $5 million for the assets of TTR Technologies of New York. Both Midbar and TTR make technology that prevent consumers from copying music on compact discs.
Midbar has contracts with many top music companies such as Vivendi Universal's (EAUG.PA) (NYSE:V - news) Universal Music, EMI Plc (EMI.L), Bertelsmann AG (news - web sites)'s (BERT.UL) BMG and AOL Time Warner Inc. (NYSE:AOL - news)
Midbar's software has been shipped on more than 45 million CDs, but mostly in Japan and Europe, according to Adam Sexton, Macrovision's vice president of business development.
Such technology is expected to gain wider acceptance in the United States, particularly with the explosion of unauthorized file-sharing services like Morpheus, Kazaa and now-idle Napster (news - web sites), and CD-recording drives on personal computers.
But most of the recording labels are treading softly in introducing this technology given concerns of a consumer backlash and fears of alienating the newest generation of music consumers they need to succeed in their online ventures, MusicNet and Pressplay.
In April, Celine Dion (news - web sites)'s "A New Day Has Come," released by Sony Corp (news - web sites)'s (6758.T) Sony Music, topped sales charts but also infuriated fans in Europe when the disc's copyright protection technology, developed by Sony, sent computers crashing.
Macrovision said its technology will allow consumers to play CDs on both CD players and personal computers, but prevent them from duplicating the CDs for unauthorized sharing.
Macrovision's new SafeAuthenticate technology is a new feature that allows consumers to "rip" a copy of the CD onto their hard drives and play it again on their computer, but it prevents peer-to-peer file-sharing.
To date, Vivendi's Universal Music has released about four CDs in the United States with Midbar copy protection technology, with sources saying there have been very few consumer complaints.
Macrovision is betting on the likelihood that there will be wider acceptance of these technologies and an industry standard will emerge sometime soon, said Sexton.
"By combining both Midbar and Macrovision best-of-breed technologies, we hope to facilitate the adoption of industry standards so that the music business can roll out a robust solution to combat piracy that is currently plaguing the industry," Sexton said.